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Estab l i shment of the

NZDF Human Resource

Serv ice Centre

Report No. 10/2012

16 August 2012

E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - i

Con ten t s

Executive summary iii

Chief of Defence Force response xi

Section 1 Introduction 1

Section 2 Human Resource Service Centre Project Phase 1 5

Section 3 Human Resource Service Centre Project Phase 2 and

current operations 17

Section 4 Implications for future human resource administration 31

i i - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - i i i

Execu t i ve summary

In t roduc t i on

1 We looked at how the NZDF set up the Human Resource Service Centre,

and the progress made in transitioning human resource support services

to a central business unit. We also looked at how the Centre is performing.

2 The Human Resource Management Change Programme was a structured

work stream under the Defence Transformation Programme, aimed at

centralising most human resource functions and generating savings by

reducing the number of personnel performing those functions.

3 The Human Resource Service Centre Project was a component of the

change programme. It was delivered in two distinct phases. Phase 1 was

to establish a centralised business unit providing human resource

administration and payroll transactions, and support to NZDF personnel

using standardised processes and tools.

4 Phase 2 of the project is consolidating the Human Resource Service

Centre, centralising other human resource support services not covered in

Phase 1, and seeking further efficiencies.

Key f i nd ings

5 The prime objective of the Defence Transformation Programme was to

create new organisations which would put the NZDF in a better starting

position for future change. The Human Resource Service Centre Project

delivered a national human resource administration centre within the

time-frame required by the Defence Force Executive Leadership Team.

The project also achieved the financial benefits forecast in the investment

case through personnel savings.

6 The efficiency and effectiveness of the Human Resource Service Centre in

processing transactions and user requests suffered initially through some

staff lacking knowledge and experience. Training requirements to

overcome this situation necessitated diversion of resources . Delays in

introducing new technology to facilitate improved interaction with users

also adversely affected the service provided.

E x e c u t i v e s umma r y

i v - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

7 These issues, which continue, have undermined the ability of the Human

Resource Service Centre to deliver the level and quality of service required.

There is user dissatisfaction with some of the services being delivered.

8 The establishment of the Human Resource Service Centre has been

accompanied by reductions in, or cessation of, military administration

trades. The availability of military personnel with human resource

administration experience is declining more rapidly than anticipated.

Human Resource Centre management is having to focus on critical

initiatives to advance civilianisation, improve training, and develop a

knowledge base to capture the experience of military personnel while

they are still available.

9 Progress in all these areas has been slow. The future success of the

Human Resource Service Centre depends on its ability to recruit, train

and employ enough qualified and experienced civilians to deliver a

comprehensive human resource administration service for both military

and civilian members of the NZDF.

10 Much work remains to be done before the effective delivery of

comprehensive human resource support services to the NZDF can

be assured.

The HRSC P ro j ec t

11 The Human Resource Centre Project was established under the Human

Resource Management Change Programme. The project was required to

deliver a single, consolidated HR service centre to provide HR

transactional interaction and support to users. It was also to achieve a

significant reduction in the number of people providing HR services.

12 The establishment of the Human Resource Service Centre was undertaken

over two phases:

a Phase 1 – to deliver, by 30 June 2011, a consolidated HR

administration and payroll service for the main administration units.

b Phase 2 – to deliver the future HR Service Centre functions,

incorporating other back office HR services.

13 In July 2010, the Executive Leadership Team approval the location of

Upper Hutt for the Human Resource Service Centre and the process by

which personnel would be migrated to a single co-located site.

E x e c u t i v e S umma r y

E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - v

14 Project planning and implementation was required to be consistent with

the overall framework defined for the Defence Transformation

Programme Human Resource Management Change Programme. We

found that appropriate project management practices were followed for

the implementation of Phase 1 of the HRSC project. Project procedures

were established covering governance (senior management involvement,

alignment with strategy), planning (objectives, realistic timelines),

management (project framework, variations, inter-relationships with

other projects, risk), resourcing (sufficient personnel skills),

communication and training (internal and external), monitoring and

reporting (timely and accurate, progress/outcomes).

15 Transfer of HR administration to the Human Resource Service Centre was

completed in August 2011, when the Service Centre opened in premises in

Upper Hutt. Phase 1 of the Project was closed and responsibility for the

on going management and development of the business centre was

transferred to the Director Human Resource Service Centre.

16 The Human Resource Service Centre was established with 109 posts. On

commencing operations 84 percent of the posts were filled, with 18

positions vacant. The Service Centre was organised into six divisions

including a Contact Centre, HR Support, Payroll Operations, Support

Surge and Processing Centre, Course Nominations and Enrolments, and

Business Improvement.

17 The Human Resource Service Centre was delivered within the timeline

required by the Executive Leadership Team. HR administration

personnel costs were reduced by 129 FTE (made up of an overall

reduction of 130 military posts and an increase of 1 civilian post),

delivering an ongoing saving of $7.86 million per annum.

18 A number of issues arose relating to staffing and technology as the

Human Resource Centre commenced operations. These issues impacted

on the efficiency and effectiveness of the new organization.

19 In particular, the experience level of many of the personnel posted to the

Service Centre was lower than expected and resulted in errors being made

in both the military administration and payroll areas. Other Service

Centre resources were diverted to rectifying the problems being

experienced. There was also a substantial additional training overhead to

improve the knowledge level of Service Centre staff.


v i - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

20 These issues impacted on the next phase of the project, which was to

include completing outstanding project tasks that would enable the

expected quality of service to be achieved. The additional benefits that

were expected to be gained through further reductions in staff levels

and the introduction of improved technology were reliant on this

being achieved.

21 Early issues with staffing levels and information and communications

technology that affected the level of service being delivered to customers

has required management to focus on several initiatives that seen as

crucial to the future success of the Human Resource Service Centre.

Foremost in this, is the development of a knowledge base to capture the

experience of military personnel before they move on and are replaced by

civilians. Technology improvements are needed to improving the quality

of service.

22 Other important initiatives identified include the development of

training, communications with customers, and further refining processes

and procedures.

23 Progress with these initiatives has been slow. Diversion of business

improvement resources to more pressing tasks, such as changes required

as a result of internal and external audits, legislation and NZDF policy,

has meant that little work has been undertaken on developing a

knowledge database and capturing information from military personnel.

24 Delays in introducing new technology impact on the level of service being

provided to customers. An updated telephony system and service

management system on which the development of customer request

management, workforce management, and quality management

improvements depend have not yet been implemented.

25 The Human Resource Service Centre has yet to develop comprehensive

and structured training programmes for its staff. Funding was recently

approved for two training posts within the Service Centre.

26 Communication between the Human Resource Service Centre and users

across the NZDF has been poor. There is no ready means for the Service

Centre to promulgate information on new or amended processes and

procedures. A communications strategy to improve the effectiveness of

communication with users is being developed. Improved methods of

monitoring customer feedback are needed.

27 The Human Resource Service Centre was to review ‘broken’

administration processes identified as HR tasks were shifted from units to

the Centre. This has not been fully advanced due to resource gaps.


E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - v i i

Action needs to be commenced without further delay while residual

administrators are still available at camps and bases to assist in

identifying and implementing solutions.

28 Many administrators in the Services undertook more than HR and payroll

tasks. When the people were removed, those other tasks became orphaned.

Frequently there was no alternate resource or capacity left to continue

them. Business design analysis appears to have focussed on those tasks

that were to form part of the Human Resource Service Centre, and paid

little attention to remaining tasks. We had found a similar situation when

the Joint Logistics and Support Organisation1 was established.

Future imp l i ca t i ons fo r HR admin i s t ra t i on

29 The reorganisation of HR administration in the NZDF, including the

establishment of the Human Resource Service Centre, has resulted in

Service administration trades being either significantly reduced—as in the

Navy, or disbanded—as in the Army and Air Force. The Navy’s Writer

trade continues to provide support in seagoing ships and some local

support in shore establishments. The Army and Air Force have

implemented new or modified trades that will provide some limited

administrative support to operational unit commanders.

30 The Human Resource Service Centre will be the only employer of

specialist HR administrators. It must therefore have the capacity and the

systems to train and develop staff for its own needs as well as for other

areas of the NZDF involved in HR administration. The changes being

made by the Services, described in the previous paragraph, will still

necessitate military personnel receiving some level of training in HR

administrative policies and processes. The Service Centre has factored

this into its training development.

31 All Services generally support the concept of a national centre responsible

for HR administration and payroll transactional and processing activities.

There is however concern as to the absence of any HR administration

presence on camps and bases. Some of this concern reflects the

remoteness of the Service Centre and the lack of local face to face

contact. Dissatisfaction with some of the services currently being delivered

does not help users or their managers accept the changes. A programme

of regular visits by Service Centre managers to camps and bases would

be beneficial.

1 Now Defence Shared Services.


v i i i - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

32 The removal of experienced military administration personnel from many

units has increased the work load for commanders and their officers.

There is a view that not all military HR issues can be reduced to a process,

and that young Service members in particular will still look to their unit

officers for advice and guidance. The NZDF as a military organisation

has a high level of responsibility to look after the interests and well-being

of its personnel. Military HR administration is not simple and

commanders need to be aware of HR policies and procedures.

33 It will be important for the Human Resource Service Centre to ensure it

has adequate staff capacity, that Service Centre operators are trained for

the tasks they perform, and that effective modern call-centre technology is

available if it is to improve the level of service it delivers. We understand

that any major technology improvement will have to wait for the Human

Resource Management Information System project to be completed.

Recommenda t ions

34 It is recommended that the NZDF:

a in respect of the Human Resource Service Centre:

(i) assigns priority to the development of a knowledge base of

military HR matters, so that this knowledge can be captured

before remaining specialists depart;

(ii) introduces regular visits by Human Resource Service Centre

senior personnel to camps and bases as a means of improving

the mutual understandings between the Centre and military

commanders, and to facilitate discussion on emerging issues;

(iii) addresses, with the Services and as a matter of priority,

processes that are incomplete or do not incorporate necessary

Service-specific aspects. This needs to be progressed before

the remaining Service administration specialists are lost;

(iv) improves the timeliness and quality of services provided by

the Human Resource Service Centre;

(v) improves user guidance and information, and methods of

disseminating changes to policies and processes;

(vi) develops a comprehensive training framework for Human

Resource Service Centre personnel;


E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - i x

b in respect of wider HR administration:

(i) recognises that many junior personnel may not have ready

access to DIXS terminals or KEA kiosks and may not be

maintaining their personal information to the level expected;

(ii) requires Service initial training establishments to deliver, with

the assistance of the Human Resource Service Centre,

appropriate information on personal HR administration

responsibilities;

(iii) ensures that junior officer training and training for unit

commanders and others with personnel management

responsibilities, includes appropriate elements of NZDF HR

policy, processes and administration such that officers can

provide sound initial advice to their personnel when required;

and

(iv) requires that, where new processes are developed as part of

business change, the impact on residual functions be fully

investigated. Solutions need to be identified in conjunction

with the Service or other business component from which the

primary function is being transferred before personnel

delivering those functions are moved.


x - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - x i

Ch ie f o f De fence Fo rce re sponse

Ch ie f o f De fence Fo r ce r esponse

1 The context and content of this report is noted and considered to be a fair

representation of the issues and challenges of establishing the HRSC.

Furthermore, the recommendations are supported, a number of which are

already under action.

2 I note that the report has a common theme relating to the need for

adequate and ongoing resourcing of the HRSC. In particular, personnel

and IT resources will continue to present a challenge.

C h i e f o f D e f e n c e F o r c e r e s p o n s e

x i i - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - 1

Sec t i on 1

In t roduc t i on

In t roduc t i on

1.1 We examined the setting up of the Human Resource Service Centre

through the Human Resource Service Centre Project, and the progress

made in transitioning human resource (HR) support services to a central

business unit. We also looked at the status and effectiveness of the

Human Resource Service Centre.

1.2 Field work for this review was completed in April 2012.

Backg round

1.3 The Human Resource Management Change Programme was a structured

work stream under the Defence Transformation Programme. The focus of

the Human Resource Management Change Programme was to centralise

most HR functions and create savings by reducing the number of

personnel performing those functions.

1.4 This centralisation led to the HQ NZDF Personnel Branch becoming the

Defence Personnel Executive. Functions to be centralised within the

Defence Personnel Executive included HR support services, HR advisory

services, recruitment, training and education, chaplaincy, psychology and

workforce planning. This centralised organisation was to be the

foundation of a new HR operating model for the NZDF.

1.5 The Human Resource Service Centre Project was split into two phases.

Phase 1 was to establish a centralised business unit providing HR

administration and payroll transactions, and support, to NZDF personnel

using standardised processes and tools. Efficiencies were to be derived

largely from the reduction in personnel required to deliver the services.

1.6 The Phase 1 plan for the Human Resource Service Centre Project required

the phased delivery of a consolidated HR administration and payroll

service between December 2010 and June 2011. Phase 1 was completed

when the Human Resource Service Centre commenced operations at its

new Upper Hutt premises in August 2011.

S e c t i o n 1 - I n t r o d u c t i o n

2 - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

1.7 Phase 2 of the project, which is being conducted alongside business as

usual activities, encompasses the consolidation of the established Human

Resource Service Centre, the centralisation of other HR support services

not included in Phase 1, and the achievement of further efficiencies in the

delivery of HR administration. Full civilianisation of a smaller Human

Resource Service Centre over a 3-5 year period is one way in which

benefits are expected to be realised.

Human r e s o u r c e s t r u c t u r e s a n d d e l i v e r y

1.8 In July 2009, the NZDF Executive Leadership Team approved an

investment case which, amongst other things, included the development

of a national administration function (the Human Resource Service

Centre) for the delivery of all HR support services for military and

civilian personnel.

1.9 Further work undertaken on the investment case revealed that the

complexity of the analysis required had been underestimated while the

benefits identified had been overestimated. More administration processes

than had been expected fell within the scope of the Service Centre, which

significantly increased the analysis and detailed design required.

1.10 This work resulted in the development of a reduced benefits proposition.

The Executive Leadership Team approved the revised benefits

proposition in July 2010. Financial benefits were estimated at $8.87

million per annum, to be fully recognised in the 2012/13 financial year.

This figure was based on achieving overall personnel savings of 128 Full

Time Equivalents.

P a y r o l l

1.11 In June 2009, the Executive Leadership Team approved a business case for

the consolidation and centralisation of payroll functions. This project was

subsequently merged into the HR Structures and Delivery project as

benefits were dependent upon rationalisation of the HR administration

and advice functions.

1.12 In November 2009, a decision was made to centralise civilian payroll and

HR administration functions. The Civilian Payroll and Administration

Project was completed in August 2010 when these functions were fully

centralised and consolidated within Defence Shared Services. These

functions were then included in the Defence Shared Services activities to

be transferred to the Human Resource Service Centre.



1.13 At this point, the full consolidation of all payroll functions was considered

to be outside the scope of the HR Structures and Delivery Project as it was

considered dependent on developments associated with the Human

Resource Management Information System project2 which at that time

was in the early design phase.

C o n s o l i d a t i o n o f A rm y a n d A i r F o r c e a dm i n i s t r a t i o n

1.14 In addition to the consolidation of civilian payroll, both the Army and the

Air Force consolidated their administration activities. These initiatives

were seen as essential forerunners to the transfer of Service administration

personnel to the Human Resource Service Centre.

HR o p e r a t i n g mo d e l

1.15 To accommodate the approved future delivery option for HR

administration and support, a new HR operating model was developed.

This model, which was formally endorsed by the Executive Leadership

Team in November 2009, identified that there were four distinct functional

components required to support HR functions within the NZDF:

a strategic personnel leadership;

b HR advisors to provide advice to management;

c centres of expertise to provide specialist HR expertise within

functional areas; and

d a Human Resource Service Centre to provide HR transactional

interaction and support to users.

1.16 On 31 May 2010, the HQ NZDF Personnel Branch became the Defence

Personnel Executive. From this date, NZDF HR processes, structures,

policies, and delivery were centralised under a single point of accountability.

Human R e s o u r c e S e r v i c e C e n t r e P r o j e c t

1.17 The Human Resource Service Centre Project was established to deliver a

single, consolidated human resource service centre and reduce HR

personnel by 128 FTE. As well as the prime objective of setting up a

Human Resource Service Centre, the project was required to

accommodate within its activities the overall move towards the new HR

operating model.

2 The HRMIS project involves the replacement of the existing ad hoc human resources administration systems with a single integrated solution.



1.18 It was proposed that the establishment of the Human Resource Service

Centre be undertaken over two phases:

a Phase 1 would deliver, by 30 June 2011, a consolidated HR

administration and payroll service to replace the main Service

administration units.

b Phase 2 would deliver, over a longer period, the future HR Service

Centre functions, incorporating other back office HR services.

1.19 The Human Resource Service Centre Project Team developed three

options for the implementation of the Service Centre. Options 1 and 2

were based on standardising all high volume processes and then

progressively migrating each Service’s HR functions to a single co-located

site. Option 3, which was not favoured, advocated co-locating resources

first and standardising processes afterwards.

1.20 Option 2 differed from Option 1 in that it proposed the Upper Hutt region

as a location for shared services.

1.21 In May 2010, the Human Resource Management Monthly Management

Group approved:

a implementation of a new command structure for HR payroll and

administration,

b inclusion of the relevant Defence Shared Services civilian

administration and payroll teams in the Human Resource Service

Centre project, and

c formation of a foundation Human Resource Service Centre by

30 December 2010, noting that Phase 1 of the Human Resource Service

Centre Project was targeted for completion by 30 June 2011.

1.22 In July 2010, the Executive Leadership Team approved the

implementation of a Human Resource Service Centre, to be located in

Upper Hutt.


Sec t i on 2

HRSC p ro j ec t phase 1

In t roduc t i on

2.1 This section discusses how the NZDF managed development of the


Governance

2.2 The DTP Steering Committee of the Executive Leadership Team was

responsible for the key decisions affecting the delivery of the various

Defence Transformation Programme work streams, including the Human

Resource Management Change Programme. Decisions required for each

work stream were referred to the Executive Leadership Team through

the relevant sub-committee; in the case of the Human Resource

Management Change Programme this was the Remuneration and

Establishment Sub-Committee.3

2.3 For the Human Resource Service Centre Project implementation phase,

the Human Resource Service Centre Project Manager reported through

the Human Resource Management Change Programme Programme

Director to the Remuneration and Establishment Sub-Committee.

2.4 The Human Resources Management Monthly Management Group was

the forum to which issues were presented for resolution. The Monthly

Management Group provided oversight and direction and, where

appropriate, escalated decisions to the Remuneration and Establishment

Sub-Committee for approval.

P l ann ing

2.5 A Project Management Plan and Project Implementation Plan were raised

to support the conduct of the Human Resource Service Centre project.

The Project Management Plan provided a current state report for the

project and outlined the overall project purpose and requirements. The

Project Implementation Plan, which was approved in September 2010,

established the scope and provided a roadmap for the project.

3 The Remuneration and Establishment Sub-Committee was replaced by the Strategic Human Resources Committee (SHRC) in May 2011.

S e c t i o n 2 - H uma n R e s o u r c e S e r v i c e C e n t r e P r o j e c t P h a s e 1


P r o j e c t o b j e c t i v e s

2.6 The project’s objectives were to:

a establish full centralised accountability and responsibility for the HR

administration and payroll function under the Defence Personnel

Executive;

b define the roles required to perform each business activity and the

metrics by which the service offered can be effectively measured;

c remove the need for face to face engagement for most generic activity

for civilian, military and reserve personnel. There will be minimal HR

administration presence on camps and bases;

d establish the right structure to handle transactional processing, front-

line customer queries and specialists to support Phase 1;

e standardise processes to deliver an efficient administration and

payroll service;

f establish a centralised model;

g identify and implement minor technology enhancement ‘quick wins’

to support a greater level of self service;

h ensure the HR Service Centre is staffed with the right people to

support the NZDF’s needs and meet customer satisfaction;

i establish Tier 2, transactional advice on associated HR admin and

payroll activities;4 and

j increase self-service tools (providing better information to support

self-service), and require NZDF personnel to fully utilise existing self-

service channels.

T im e l i n e s

2.7 The project was required to have a Foundation Service Centre in place by

30 December 2010. Phase 1 was to be completed by 30 June 2011.

2.8 Three streams of work were identified for the delivery of the Human

Resource Service Centre: strategy and implementation; people and

processes; and civilian payroll consolidation.

4 Tier 2 advice provides case management support for more complex enquiries and requests. It provides direct support to commanders and HR advisors. See 2.26.

S e c t i o n 2 – H uma n R e s o u r c e S e r v i c e C e n t r e P r o j e c t P h a s e 1


2.9 A delivery plan that identified the roll-out strategy by stages and waves

was included in the Project Implementation Plan. This identified the

programme of work and the major project milestones and dates by which

each should be completed. A phased approach for the migration of

administration personnel to the Human Resource Service Centre was

planned, with each of the main Service administration units being

transferred separately between February and May 2011.

Management

2.10 The project framework was required to be consistent with that defined for

the Human Resource Management Change Programme. Management

and control requirements included developing and maintaining a project

schedule, risk and issues registers, an action log, change control processes,

decisions register, and lessons learned.

2.11 Major risks identified at the outset of the project were included in the

Project Implementation Plan along with potential impacts and

mitigation action.

2.12 The inter-relationship of the Human Resource Service Centre project with

other projects was clearly outlined in the Project Management Plan,

identifying both those projects that were dependent on the Human

Resource Service Centre Project and those that the project depended on.

The consolidation of civilian payroll, consolidation of command of Army

administration centres, and consolidation of RNZAF administration were

three projects that needed to be completed to facilitate the transfer of

these functions to the Human Resource Service Centre.

Resou r c i ng

2.13 The Project Management Plan identified the personnel requirements for

the project. Contractors were engaged for approximately half of the

personnel requirements, including the project manager and work stream

leads. The Services provided personnel to assist with the project.

2.14 The project was adequately resourced and, while there were changes to

the project team, project management remained constant from July 2010 to

the project closure in July 2011. To provide continuity, some critical

personnel transitioned from the Human Resource Management Change

Programme to the Human Resource Service Centre Project and then on to

the Service Centre itself as it was stood up.



2.15 Total costs for the Human Resource Service Centre project fell

predominantly in the 2010/11 financial year. Capital expenditure was

$2.221 million, with a further $0.983 million of operating expenditure.

Commun ica t i on and t ra i n i ng

2.16 A Communications Plan was developed that included initiatives for

informing users of the change to service delivery. This involved the

distribution of communications materials such as wallet cards and

posters. Messages and articles were included in NZDF and Service

magazines and distributed via the NZDF intranet.

2.17 National road shows were presented across the NZDF prior to the first

HR payroll and administration activities being transitioned to the

foundation Human Resource Service Centre. Separate presentations were

given to commanding officers and managers, and military and civilian

personnel generally.

2.18 Specific briefing sessions were conducted for each Service’s HR

administrators prior to their transfer to the Human Resource

Service Centre.

2.19 A Training Strategy and Plan was developed that outlined the training

needs of the administration personnel being transferred to the Human

Resource Service Centre. This included induction training and process

training. New processes were analysed by project team members and a

training delivery plan developed for staff. Areas outside the Service

Centre were involved in parts of this process. The Training and

Education Directorate assisted in developing training plans and

undertook some of the training. HR Advisors were required to assist in

the initial training of Service Centre Tier 2 advisory staff (see para 2.26).

Mon i to r i ng and r epo r t i ng

2.20 The overarching Human Resource Management Change Programme

defined reporting requirements. There was weekly reporting to the

Human Resource Management Change Programme Programme Director

and monthly reporting to the Monthly Management Group.

2.21 The weekly project status report outlined the key activities that were

being undertaken, and included information on project changes, issues

and risks. Progress against project milestones was also reported.



2.22 Regular monthly reporting was through the Human Resource

Management Change Programme Programme Director. Specific reports

were presented where key decisions on the project were required.

Important issues that needed to be resolved at a senior level to progress

the project were also escalated to Monthly Management Group meetings.

2.23 Benefits reporting to the Benefits Governance Group, outlining the

progress being made in capturing expected benefits from the project, were

prepared from September 2010. Final reporting of benefits and savings

achieved was to the Executive Leadership Team Strategic Human Resource

Committee. (See paragraph 2.27 for details of the benefits reported.)

Human Resou r ce Se rv i ce Cent r e o rgan i s a t i on

2.24 In August 2011, HR administration and payroll functions were centralised

under the Defence Personnel Executive as the Human Resource Service

Centre was fully established. The Human Resource Service Centre Phase 1

Project was closed and responsibility for the on going management and

development of the business centre was transferred to the Director


2.25 The Human Resource Service Centre commenced with 109 established

posts. At that point, the Centre was 84 percent manned against the

establishment with the breakdown of positions filled being:

a Navy 11 (10%),

b Army 34 (31%),

c Air 13 (12%),

d Civilians 33 (30%)

e Unfilled 18 (16%) (1 military and 17 civilian).

2.26 The Service Centre was organised into six divisions:

a Contact Centre – a military team providing Tier 1 HR advice,

including answering enquiries/requests that can be quickly resolved.

b HR Support – separate military and civilian teams providing Tier 2

HR advice, including case management support for more complex

enquiries/requests. Provides direct support to commanders and HR

Advisors. The civilian team also processes civil staff payroll including

overpayments.

c Payroll Operations —civilian team delivering NZDF-wide payroll

compliance and delivery.


1 0 - E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e

d Support Surge and Processing Centre—a military team for processing

payroll which also handles military overpayments and the

investigation and completion of legacy work. Provides reporting

support to the wider NZDF. Mixed military and civilian team

provides bulk entry of data into the HR system.

e Course Nominations and Enrolments—civilian team managing

administrative requirements for personnel undertaking NZDF

courses.

f Business Improvement— mixed team providing support for

management of new/change requests and ongoing review and

continuous improvement of work functions and processes.

Continuous improvement, internal compliance and training

development.

Phase 1 a ch i evemen ts

2.27 The Project Closure Report identified the success of Phase 1 as:

a the command and control of a centralised HR Service Centre was in

place by August 2011;

b the same level of service was achieved with the introduction of an

0800 number, central email address and education material to

promote self-service;

c personnel costs were reduced by 129 FTE (made up of an overall

reduction of 130 military posts and an increase of 1 civilian post)

delivering an ongoing saving of $7.86 million per annum;

d the NZDF intranet was loaded with standardised processes,

procedures and forms;

e 90-100% of transactions were being processed by the HR Service

Centre and not at administration units;

f a one-stop-shop for all HR Administration, Payroll, Tier 2 HR Advice

and other HR back-office functions was in place; and

g there was an increase in self-service, removing face-to-face support

within camps and bases and removing back office transaction

processing on bases.

2.28 Each of the above factors provides a quantitative rather than qualitative

assessment of success. There were a number of issues encountered during

the implementation of the Service Centre that impacted on the efficiency

and effectiveness of the start-up organisation and affected the quality of

the service that was provided.


E s t a b l i s h m e n t o f t h e N Z D F H u m a n R e s o u r c e S e r v i c e C e n t r e - 1 1

T rans fe r o f m i l i t a ry pe rsonne l

2.29 Although the Phase 1 project team was involved in the initial selection of

military personnel for the Human Resource Service Centre foundation

team, it was left to the Services to identify personnel for the full stand up

of the Centre. Service concerns over the Civilianisation project, the

Value for Money Review and, in the case of the Army, the establishment

of a new Operational Support and Information Specialist trade to which

many administrators were transferred, restricted the pool of quality

people available.

2.30 Some Navy personnel were reluctant to move from Auckland to Upper

Hutt. There were also delays in transferring Army personnel, to the

extent that it was decided to split the transfer into two separate stages. In

the case of Air Force personnel, short duration postings proved a

challenge as administrators were required for conversion training to a

new logistics trade that the Air Force was establishing.

2.31 As a result of the above matters, staff experience levels at the time the

Centre commenced full operations were not as good as had been

envisaged. This resulted in errors being made in both the military

administration and payroll areas, particularly when the HR

administration workload increased significantly because of the

Civilianisation project and the concurrent introduction of substantial

changes to military allowances.

Res idua l adm in i s t ra t i on p ro ces ses

2.32 As HR administration tasks were taken over by the Human Resource

Service Centre many existing processes were broken. New processes

were developed to provide appropriate links to the Service Centre, rather

than local administrators, and back to the Service. In some instances,

attempts to standardise processes across the NZDF meant that the

importance of some Service-specific practices was not sufficiently

recognised and a number of common processes were effectively

incomplete or incorrect.

2.33 Many administrators at camps and bases had undertaken more than HR

administration and payroll tasks. With the removal of these personnel

there was no–or only limited–capacity to pick up the orphaned tasks that

were not transferred to the Service Centre. Often the existence of those

legacy tasks was not apparent until the person involved was removed.



2.34 We had previously found that similar issues arose during the

establishment of the Joint Logistics and Support Organisation (now

Defence Shared Services). We formed the view at that time that business

analysis focussed on identifying and transferring those tasks and activities

that were to move to the new organisation, and failed to recognise and

address tasks that were not transferring. We were surprised to see that

the lessons from the Joint Logistics and Support Organisation project

appear not to have been recognised in the case of the Service Centre.

2.35 The Human Resource Service Centre has since recognised the need to

identify the full range of functions undertaken by a particular function.

We were informed that in its investigation of the Deployed Personnel

Support Centre and the SAS, the Human Resource Service Centre is

addressing with the relevant Service or unit how residual functions will

be performed.

2.36 It had been acknowledged in Phase 1 planning that here would be a need

to retrospectively clean up administrative processes that had been broken

and remained incomplete, as well as those tasks that had been orphaned.

However, the size and complexity of the undertaking, and the resources

required to address the residual issues identified, were greater than had

been predicted. This supports our view that more attention should have

been paid to the impacts on residual activities during the business

analysis stage.

In fo rmat ion and commun ica t i on t echno logy

2.37 Much of the success of the new Human Resource Service Centre was to be

derived from the implementation of new technology to make it easier for

users to access the information they required themselves, and to facilitate

efficient interaction with the Centre.

2.38 Improving technology was to be a staged process, with the most

significant advances expected to be derived from the future Human

Resource Management Information System project. As part of the Phase 1

fit-out of the new accommodation, funding for certain critical technology

improvements was sought and approved in December 2010. These were

aimed at increasing self-service facilities and enhancing the capacity of the

Kea/ATLAS5 system to cope with the expected self–service increase.

Other improvements required for Phase 1 included a new telephony

system, a new service request management tool, and web-enabled access

to the Service Centre intranet website.

5 Kea is a self-service kiosk system to enable personnel to maintain elements of their own personnel information. ATLAS is the NZDF’s current human resource management information system.



2.39 Enhancements to Kea were intended to make it more user-friendly and

easier for units or individuals to undertake certain tasks themselves. This

included such things as automatic approval for timesheets, the bulk entry

of allowance requests, and the facility to commence pay allotments. Due

to a shortage of Communications and Information Systems Branch

personnel with knowledge of the Kea system, the improvements for

timesheet entry and bulk allowance entitlements were not achieved.

Processing of these transactions continued to be done through the Service

Centre, increasing its overall workload. The proposal to enable personnel

to set up their own allotments has since been withdrawn.

2.40 The upgrade to the existing telephony system was needed to enable such

things as voice recording and screen capture to be used to improve

workforce management. Delays with this upgrade meant that the

Service Centre continued to use the existing telephony system with its

inherent limitations.

2.41 Delays were also experienced in replacing a temporary service request

management system. As a result, the ability to monitor and record the

progress of requests to the Service Centre remained limited.

2.42 Web-enabled user access from the intranet was deferred as it was decided

this should be considered as part of the Human Resource Management

Information System project.

T ra in ing

2.43 Four training positions were included in the original design of the Human

Resource Service Centre, to provide for internal and external training

needs. Internal relates to Service Centre staff training whilst external

involves customer training such as recruit courses and NCO promotion

courses. These positions were removed in the final planning stage when

it was considered the Training and Education Directorate’s responsibility

to provide the required training.

2.44 Subsequent work undertaken by the Training and Education Directorate6

concluded that the extent of training that needed to be coordinated and

delivered justified the establishment of two training posts within the

Service Centre. However, before training personnel could be recruited

approval to establish these positions needed to be sought through the

Strategic Human Resource Committee.

6 Now the New Zealand Defence College. However, we continue to refer to it as the Training and Education Directorate in this report as this was the title in use at the time.



Coverage o f HR adm in i s t r a t i on

2.45 When the Human Resource Service Centre became operational a number

of administration aspects remained with existing units or areas of

responsibility:

a Non-operational overseas postings, for example Defence Attachés or

long overseas training courses, continued to be administered by the

respective Services.

b The HQ JFNZ Deployed Personnel Support Centre was removed from

Phase 1 because of the specialist nature of joint operations, pre-

deployment requirements and deployed administration. A strategy to

incorporate this was to be developed as part of business as usual.

c Senior officers pay - transition was underway but not completed.

d Naval ships – the Navy retained the Writer trade (administrators) for

its ships.

e Performance documentation – while the Service Centre was

distributing this documentation for the Army, Air Force and civil

staff, the Navy had retained control of this process.

2.46 SAS administration and payroll was excluded from the scope of Phase 1

and therefore remained outside of the Service Centre.

2.47 All the above areas were to be incorporated into the Service Centre as

soon as they could be accommodated. Work to integrate these areas into

the Centre was to be part of ongoing business as usual activities.

Merg i ng o f m i l i t a ry and c i v i l i an HR adm in i s t r a t i on

2.48 Military and civilian administration and payroll remained separate within

the Human Resource Service Centre and there were discrete military or

civilian teams dealing with HR enquiries or payroll. The original intent

was to have teams in place that could deal with both military and civilian

enquiries. This would have facilitated the transfer of knowledge between

military personnel and civilians, and provided the foundation for the

measured transition of the Service Centre to a totally civilianised

organisation over an estimated two year period.

2.49 Delays and difficulties with the transfer of personnel meant it was not

possible to commence the merger process and, as a result, the military and

civilian teams remained separate. The merging of personnel into single

teams covering all aspects of administration and payroll therefore became

an area for ongoing development.



F ind i ngs

2.50 Appropriate project management practices were used for the

implementation of Phase 1 of the Human Resource Service Centre project.

Project procedures covered governance, planning, management,

resourcing, communication and training, monitoring, and reporting.

2.51 The prime objective of the Defence Transformation Programme was to

create new organisations which put the NZDF in a better starting position

for future change. Consistent with this overall philosophy, the main

intent of Phase 1 of the project was to get the Service Centre up and

running within a particular time-frame and to achieve the financial

benefits relating to personnel savings directed by the HR Structures and

Delivery business case. Timeframe and personnel savings objectives were

largely achieved.

2.52 While the Human Resource Service Centre was established and began

operating within the expected timeframe, there were issues that

impacted its efficiency and effectiveness. The key issues related to

staffing and technology.

2.53 In particular, the experience level of many of the personnel posted to the

Service Centre was lower than expected, which resulted in errors being

made in both the military administration and payroll areas. Other Service

Centre resources were diverted to rectifying the problems being

experienced. There was also an additional training overhead as managers

attempted to provide personnel with the knowledge they needed.

2.54 These issues impacted on the next phase of the project which was broadly

aimed at supporting the initial organization and completing outstanding

tasks that would enable the Service Centre to be brought up to a level

where it could deliver the quality of service expected. The additional

benefits that were expected to be gained through further reductions in

staff levels and the introduction of improved technology were reliant on

this being achieved.

Recommenda t ion

2.55 It is recommended that the NZDF:

a requires that, where new processes are developed as part of business

change, the impact on residual functions be fully investigated.

Solutions need to be identified in conjunction with the Service or other

business component from which the primary functions are being

transferred before personnel delivering those functions are moved.


Sec t i on 3

HRSC p ro j ec t phase 2 and cu r ren t

ope ra t i on s

Phase 2 imp l emen ta t i on

3.1 The Project Implementation Plan for Phase 2 was prepared in June 2011.

The immediate objectives of Phase 2 included:

a closing Phase 1 of the project by completing the project closure report,

securing funding for future key technologies and embedding Tier 2

HR Advice support to commanders and managers);

b developing a strategy to capture HR administration knowledge before

current Service specialists were lost to the organisation;

c developing requirements for key technologies to deliver the benefits

the Centre was to achieve;

d bridging the gap between Commanders and the Centre by gathering

requirements and understanding their needs;

e cleaning up any broken administration activities arising from

implementation of Phase 1; and

f embedding a continuous improvement culture in the Centre.

3.2 Some activities would be completed as Phase 2 tasks, while some would

be incorporated into business as usual activities. Phase 2 project tasks

included the development of a knowledge base, the delivery of key

technologies, the development of training and communications

frameworks, and cleaning up any orphaned and broken administration

activities. All of these tasks were expected to be completed by April 2012.

3.3 Tasks such as incorporating other HR administration activities would fall

under the auspices of business as usual.

3.4 A project team of 3 business analysts was to be retained to assist Human

Resource Service Centre management in achieving Phase 2 objectives.

However, due to vacancies in the Service Centre business improvement

team, these business analysts became involved in day to day activities

and in resolving immediate issues. As a result, Phase 2 project tasks

were effectively absorbed into the business as usual activities of the

Service Centre.

Se c t i o n 3 - H uman R e s ou r c e S e r v i c e C e n t r e P r o j e c t P h a s e 2 a nd c u r r e n t ope r a t i o n s


3.5 With the Human Resource Service Centre established, and with processes

bedding in, management commenced planning for the future. Foremost

was the need to reinforce the philosophy of centralisation and maximise

customer self service. An operational plan was developed to outline the

way forward. This plan included four Key Result Areas, associated goals

and initiatives.

3.6 The four Key Result Areas in the 2011/12 plan are:

a Stakeholder - to deliver efficient and effective HR administration and

pay services that consistently achieve 80% stakeholder satisfaction.

b Learning and Growth – to create an environment where people know

how they contribute, take responsibility for their contribution and are

recognised for the value that they add.

c Resources and Efficiency – to support the goals of the NZDF and

Defence Personnel Executive to standardise and consistently apply

policy and procedures; also manage resources efficiently and

effectively.

d Internal Business – to have efficient and effective core processes.

3.7 A timeline for the completion of initiatives was included against which

progress to achievement could be monitored. As such, the operational

plan provides the basis of Service Centre reporting to senior management.

As has been reported, implementation of the plan has been affected by a

number of ongoing issues that are discussed below.

Cur ren t l eve l o f s e rv i ce de l i v e ry

3.8 The Human Resource Service Centre project team had highlighted the

risks to the Project if the service declined once the Centre was established.

3.9 The issues noted in the previous section of this report, particularly those

relating to the experience level of military personnel transferred to the

Service Centre, as well as the difficulties in implementing the required

technology enhancements, had the potential to impact on the level of

service provided to users.

3.10 In order to investigate this, we interviewed a wide variety of personnel to

establish an indicator of the level of user satisfaction with the Service

Centre. Feedback was sought on the delivery of HR support services to

individuals, commanders and managers, and to functional areas within

the organisation.

Se c t i o n 3 – Human R es ou r c e S e r v i c e C e n t r e P r o j e c t P h a s e 2 a nd c u r r e n t ope r a t i o n s


3.11 We found that there are issues with the services currently being delivered

by the Service Centre. Analysis of the comments we received identified a

number of common areas of concern.

Qu a l i t y a n d t i m e l i n e s s o f s e r v i c e

3.12 Many users commented on the poor quality or timeliness of some

services, and of certain recurring incidences of errors in transactions. The

main areas involved the Tier 1 call centre, the Tier 2 case management team

and, in the case of processing, the payroll and bulk Atlas entry teams.

3.13 In many cases these issues appear to be a direct result of personnel being

stretched, in terms of both workload and level of experience.

R eq u e s t o r d o c um en t a t i o n t r a c k i n g

3.14 Users expressed concern at their inability to easily monitor or follow up

the progress of requests made to the Service Centre. This related

predominantly to requests that were being case managed, or documents

despatched to the Service Centre for processing.

3.15 Users suggested that a customer tracking system would overcome some

of these difficulties and provide assurance that requests were being

progressed satisfactorily. Users also wanted some form of confirmation

or assurance that work had been completed.

3.16 There was a lack of confidence in the Service Centre because of

requests or documents not being actioned and, in some instances, being

lost or misplaced.

P o i n t s o f c o n t a c t

3.17 The need for designated points of contact at the Service Centre was

widely raised as an issue because of the apparent high turnover of staff

within the Centre. Users expressed frustration at not being able to contact

personnel who are familiar with a particular area or issue. Points of

contact are also seen as necessary to facilitate the effective follow up of

requests or processing.

3.18 The need for points of contact signals a lack of confidence that personnel

at the Service Centre will be able to deal effectively with enquiries across

all HR activities. It reflects the lack of an effective tool for tracking and

managing requests submitted to the Centre.



I n c om p l e t e o r b r o k e n p r o c e s s e s

3.19 There are a number of process maps that should be revisited because they

are incomplete or broken and do not incorporate important Service-

specific administrative requirements.

3.20 The Services are becoming aware of these situations as they find that

processes are not being fully completed by the Service Centre. Processes

involving career management - notably performance development

planning, promotions, and extensions of service are areas identified

where this has happened. In some cases this has meant the Service having

to reclaim some or all of the tasks involved.

O r p h a n e d a dm i n i s t r a t i v e t a s k s

3.21 The Service Centre is required to clean up any orphaned administration

activities and this has been a larger task than was anticipated. Many of

these tasks are not the responsibility of the Service Centre, but there is an

ongoing obligation to find solutions. Examples of this are air accident

emergency management, welfare and family support tasks, and ’march in’

and ’march out’ procedures that need to be completed as personnel are

posted into, or out of, camps or bases.

3.22 Some tasks have fallen into a gap where other functional areas were also being

reorganised. One example of this is the processing of documentation for

attestation, particularly during recruit intakes. While the Service Centre is

responsible for processing the documentation, the actual preparation of

enlistment forms and records—which was previously undertaken by Service

administrators—has fallen into a gap between the restructured recruiting and

training organisations. With neither of these areas accepting responsible for

this task, the Service Centre surge team has stepped in to undertaken the work

required. This is however only a temporary solution until clear responsibility

has been determined. The ability to undertake these tasks in a timely manner

may be affected by other Service Centre work demands and the availability of

surge team staff.

Dem a r c a t i o n b e tw e e n H R S C a n d o t h e r c e n t r a l i s e d f u n c t i o n s

3.23 Users remain uncertain as to which organisations should be contacted in

relation to certain services. Processes associated with overseas travel

allowances and posting entitlements that involve both HR administration

and travel requests were mentioned as particular areas of difficulty.

Similarly, the crossover of HR advice between the Service Centre and HR

Advisors is proving difficult to assess, as are the links in processes

between the Service Centre and Training and Education Directorate for

course administration.



3.24 Processes involving other centralised service agencies should be reviewed

and updated. It appears that there may in some instances have been

insufficient consultation with other agencies when the Human Resources

Service Centre was determining common processes.

3.25 It may also be necessary to ensure that information is being effectively

communicated to users. Clear and accurate processes should exist

between the Service Centre and central agencies, and information on these

processes should be easily accessible to users.

A d e q u a c y o f u s e r i n f o rm a t i o n

3.26 The need for improved communication and better information,

particularly for junior ranks, was raised as a significant issue. Many of

the NZDF’s junior personnel do not have easy access to a computer and

are therefore unable to use the Military Administration and Payroll or HR

Toolkit intranet sites where the bulk of user information is held.

Anecdotal evidence suggests that activities such as updating personal

details, which are now required to be done by individuals themselves, are

not being completed because personnel are either unaware of the

requirements or unable to complete them.

3.27 While a wide variety of personal details can be updated through Kea

there are still some, such as updating passport details, which cannot. This

information has to be sent by individuals to the Service Centre. With the

departure of local administrators, previous systems of issuing reminders

have largely been abandoned and as a result updating of details is not

always being done.

3.28 Communication about changes to processes needs to be improved. At

present, processes are being changed without any warning. This may be

an indicator of the level of changes currently taking place as processes are

refined and corrected. It also reflects difficulties being experienced by the

Service Centre in effectively communicating with the wider NZDF now

that local/unit administration centres have been removed.

A d d i t i o n a l w o r k l o a d o n c omman d e r s a n d m a n a g e r s

3.29 A greater administration workload has fallen on commanders and

managers. This is so for both HR related administration and general

administration matters. While commanders previously needed to have an

awareness of administrative requirements they are now required to have

an in-depth knowledge of both HR and non-HR policies and procedures.

Some of this administration work can be distributed to other personnel in



a unit but it was noted that with current manning levels this option is not

always available. Administrative work of this nature is at risk of being

given less priority than core operational activities and in some cases is not

being completed.

3.30 One reason why commanders and managers are being required to

provide greater assistance than was anticipated may be that personnel are

not seeking HR related information or assistance themselves to the extent

that it was envisaged or intended.

3.31 More effort may be needed to encourage personnel to undertake their

own HR administration. However, the nature of military employment is

such that the organisation, through its commanders, has a high level of

responsibility to look after the overall interest of its personnel. One part

of this includes the expectation that administration support should be

readily available. Military HR administration is not simple and the

removal of any local source of advice for individuals may continue to

provide challenges in maintenance of accurate, effective and timely HR

administration. Regular visits by managers and senior staff of the Service

Centre to formation and unit commanders would assist in improving

mutual understandings and facilitate discussion on emerging issues.

Human Resou r ce Se rv i ce Cent r e management i n i t i a t i ves

3.32 The Human Resource Service Centre is largely aware of the ongoing

service delivery issues outlined above. Management activity has for

some time been focussed on initiatives that cover the most significant

areas of concern.

3.33 The Service Centre has identified two issues that are critical to its ability

to provide an effective service. Firstly, a knowledge database is needed to

enable information and expertise to be retained as Service Centre staff,

particularly military, move on. Secondly, communications, information

and technology capabilities need to be significantly improved to enable

service delivery to reach the level required.

3.34 Other priority initiatives necessary to raise the quality of service being

delivered include establishing a comprehensive training framework, and

maintaining staff morale. An effective communication strategy is needed

with clear and rapid means of disseminating changes to HR policy,

processes and procedures.



K n ow l e d g e d a t a b a s e

3.35 Military administration personnel are a disappearing resource. This

creates a significant risk to the Service Centre in terms of ongoing

knowledge and experience, particularly as the Centre will in future be

operated by civil staff with minimal military involvement. Existing

knowledge, therefore, needs to be captured and made available for new

staff. This is particularly important in relation to Tier 2 advisory personnel.

3.36 It was anticipated that the process of civilianisation would take place

gradually over a two year period. The Services had committed to posting

uniformed personnel to the Service Centre until February 2014. However,

as military numbers decline some Services may be unable to provide

suitable personnel. There has already been a drop in the number of

uniformed personnel at the Service Centre due to resignations, trade

changes and postings. This has meant that the need to replace

significant numbers of military personnel with civil staff has eventuated

earlier than anticipated.

3.37 This is illustrated by Figure 3.1 which shows that between August 2011

March 2012, the number of military personnel posted to the Service

Centre fell from 58 to 44. With both military and civilian personnel

leaving, the number of vacancies in March 2012 was 21.

Fig 3.1: HRSC personnel changes Aug 11 – Mar 12.

AUG 11 MAR 12 CHANGE

Army 34 30 -4

Navy 11 6 -5

Air Force 13 8 -5

Total Military 58 44 -14

Civilian 33 43 +10

Vacant7 Military 1 8 +7

Civilian 17 13 -4

Total Establishment8 109 108 -1

3.38 During the same period, Aug 11 – Mar 12, the average total number of

service requests per month increased from 6,500 to 8,500.

7 Vacant changes reflect the fact that 4 military positions have been re-classified as civilian posts over the period.

8 HRSC establishment has been reduced by 1 position over the period.



3.39 The Military Administration and Pay intranet site is one part of an overall

knowledge base for the use of both Centre personnel and customers. This

in conjunction with the Defence Personnel Executive sponsored HR

Toolkit, and the civilian payroll and administration intranet sites that

provide a useful and extensive guidance resource on HR matters.

3.40 No work has been undertaken on developing a knowledge base

repository for information captured from military personnel. Such a

repository would provide an essential tool both as a training resource and

as a research tool to trace historical aspects of NZDF payroll and

administration systems. The opportunity to develop this knowledge base

is quickly being lost as military personnel depart the Service Centre.

I n f o rm a t i o n a n d c ommun i c a t i o n s t e c h n o l o g y

3.41 Operational funding of $160,000 was obtained in June 2011 to employ an

external project manager to advance the Service Centre technologies. The

most critical of these technologies were the telephony solution, service

request information system and internet access for users. Other

enhancements such as workforce management and quality management

were reliant on these systems being implemented.

3.42 Other operational funding totalling $199,000 was approved for improving

the connectivity of self-service kiosks to the NZDF intranet, and for

enhancing Kea usability.

3.43 Capital funding of $390,000 was obtained for the development of

self-service channels for commanders, better known as the

‘commander’s desktop’.

3.44 Little progress has been made in improving the critical technology

required by the Service Centre. The new telephony system has not been

installed because of a combination of CIS Branch resourcing constraints

and testing failures caused by incompatibilities between the proposed

system and the NZDF network. The project has now reached a point

where alternative solutions need be considered. We were informed that

some improvement can be made to the existing system in the interim but

has not so far been sought by the Human Resource Service Centre.

3.45 Work towards a new service request information system has been

suspended pending the outcome of a study into wider service centre

structure and technology needs. In the short term, there appears to be

little scope to improve service request management, workforce

management, and quality management within the Service Centre.



3.46 Internet access for customers has also been put on hold as any solutions

identified will need to be considered as part of the Human Resource

Management Information System project.

3.47 The Communications and Information Systems Branch has not been able

to advance improvements to self-service kiosks. This work appears to

have insufficient priority for attention.

3.48 The development of technology required for the ‘commanders desktop’,

which was intended to ease the burden on commanders/managers and

make information more readily accessible, has not progressed. This has

now been put on hold and is to be considered as part of the Human

Resource Management Information System project.

3.49 For the present, the Service Centre provides commanders and managers

with direct access to the Tier 2 case management support team. Also

being considered are aspects of business that currently require personnel

to seek approval from their commanders/managers where this is mostly

just a matter of formality. Course allowances are an example of areas

where approval automation could be introduced into existing processes,

thereby providing some additional relief from administrative tasks.

3.50 The Service Centre is also looking into the possibility of automating the

generation of reminders for personnel to update their personnel details

including such matters as passport expiry dates.

T r a i n i n g

3.51 Training is largely based on the training resources developed for the

initial implementation of the Service Centre, in conjunction with courses

provided by external training providers. New foundation and advanced

level administration training packages are being developed in conjunction

with the Training and Education Directorate. Induction training for new

recruits has been developed. Training is being provided to team leaders

to develop their skills in the delivery of on-the-job training.

3.52 These steps are only an ad hoc solution. There remains a need to develop

a comprehensive training framework for the Service Centre that includes

all aspects of training including analysis, design, development, conduct

and validation.

3.53 Funding for two training posts was recently approved. Indications are

that NZDF training personnel not required elsewhere may be available to

fill these roles. This would significantly reduce the time before work can

commence on improving training resources.



C ommun i c a t i o n

3.54 We were informed that the new centralised HR administration structure

makes it more difficult to promulgate information across the NZDF. This

includes educating customers on HR administration and pay matters

generally, as well as informing customers of changes to policy that will

affect them. Whilst traditional methods such as the NZDF intranet and

NZDF and Service magazines continue to be used they do not provide as

effective a conduit as the now disestablished local administration centres.

3.55 A communications strategy is being developed in conjunction with the

Defence Communication Group to establishing the roles of each

organisation in maintaining contact with customers. Amongst other

things this is expected to identify how communication can be made more

effective. Methods for measuring the effectiveness of communications

will also be considered.

3.56 Customer feedback/satisfaction surveys also form part of the customer

relations strategy being developed. In the meantime the Service Centre

relies heavily on informal feedback or ad hoc complaints received from

users relating the service they have received.

3.57 Although Service Centre personnel visit camps and bases, this is usually

to complete specific tasks rather than to engage and communicate

generally. Commanders often expressed a view that regular and frequent

visits by Service Centre managers to camps and bases were desirable,

particularly while the NZDF is adjusting to the impact of this very

significant change to its HR administration.

R e f i n i n g a n d s t a n d a r d i s i n g p o l i c y , p r o c e d u r e s a n d p r o c e s s e s

3.58 A full assessment of administration and payroll processes was undertaken

as part of Phase 1 of the project. Standardised process maps were created.

3.59 Process maps were intended to be easily adopted by the Services.

Improvements in technology and effective information provided by way

of the intranet or direct Service Centre assistance were expected make

tasks easier to complete. The Services were to educate their personnel

into the new ways of conducting business.

3.60 This has not been achieved. There are issues with many of the standard

processes created, to the extent that in some areas, notably career

management, the Services are retaking responsibility for the tasks

involved, but they no longer have the personnel who previously carried

out these tasks.



3.61 Progress on reviewing processes has been slow. In the case of

performance management, where significant issues around service

specific requirements have arisen, a formal project to establish a NZDF

Professional Development Framework is currently being undertaken by the

Defence Personnel Executive. Once a more standardised way of

undertaking performance management across the NZDF has been

established, the role of the Service Centre in the process should be clarified.

3.62 To achieve this in other areas, cooperation and support will be required

between the respective Service(s), the Service Centre and any other part of

the organisation involved. Processes will need to be closely examined so

that effective solutions can be identified and future roles and

responsibilities agreed. With residual administrators only likely to be

available to assist in this for a short period there is a need for such

reviews to be undertaken as soon as possible.

P r o g r e s s t ow a r d s d e l i v e r i n g a l l H R a dm i n i s t r a t i o n

3.63 Certain areas of HR administration were either deferred because more

research was required or were out of scope of Phase 1. These were to be

incorporated into the Service Centre as part of business as usual activities.

3.64 The administration of Navy and Air Force personnel on non-operational

overseas postings9 was transferred to the Service Centre in October 2011.

Army administration has only recently been transferred. The challenge

here is to capture the knowledge and experience of the military personnel

who undertake this specialist task before they are posted out.

3.65 The HQ JFNZ Deployed Personnel Support Centre, which provides

administration to land based deployed personnel, has not yet been

transferred into the Service Centre as was intended. As an interim step

the Atlas bulk entry team is doing some transactional work.

3.66 Senior officers’ pay, which was taken over by the Service Centre as

planned, has recently been handed back to Defence Personnel Executive

because the person responsible resigned. The Service Centre did not have

the capacity or experience to continue undertaking this role.

9 Largely Defence Attachés and personnel on long training courses.



3.67 Performance documentation was being raised and distributed by the

Service Centre for the Army, the Air Force and civilians. The Navy had

retained control of its process. More recently the Air Force has retaken

control of its performance documentation due to issues with tasks not

being completed by the Service Centre.

3.68 The transfer of TF administration to self service has been completed in

conjunction with TF cadre facilitators. Work on SAS administration has

recently commenced and an initial meeting to develop a plan for the

transfer of activities to the Service Centre has been scheduled for May 2012.

F ind i ngs

3.69 Following the establishment of the Human Resource Service Centre,

management developed an overall operational plan to drive the future

development of the organisation. This outlined initiatives to be

undertaken in the year ahead to meet the objectives outlined for the

Service Centre.

3.70 Early issues with manpower and technology that affected the level of

service being delivered have required management to focus on several

critical initiatives. Foremost was the development of a knowledge base to

capture the experience of military personnel before they move on and are

replaced by civilians. Technology improvements were also seen as being

critical to improving the quality of the service being provided to customers.

3.71 Other important initiatives involved the development of training,

communications with customers, and further refining of processes

and procedures.

3.72 Progress with these initiatives has been slow. A lack of resources within

the Service Centre business improvement team and pressing tasks, such

as changes required as a result of internal and external audits, legislation

and NZDF policy, has meant has meant that little work has been

undertaken on developing a knowledge database and capturing

information from military personnel.

3.73 Delay in introducing new technology has continued to impact on the level

of service that can be provided to customers. An updated telephony

system and service management system are required to enable the

development of customer request management, workforce management,

and quality management improvements.

3.74 The Service Centre continues to rely on a variety of training resources

developed in an ad hoc way to provide training to staff. Funding was

recently approved for establishing two training posts within the Service



Centre to deliver the training required. The commencement of the

development of a systematic training framework for the organisation

therefore awaits the recruitment of these trainers.

3.75 A communications strategy to improve the effectiveness of

communication with users is being developed. As well as identifying

better ways of communicating information to users, improved methods of

monitoring customer feedback need to be developed. Service Centre

managers need to visit camps and bases more frequently to improve the

exchange of information and mutual understanding with military

commanders and their senior personnel.

3.76 Ongoing manpower shortages have limited the ability of the Service

Centre to review broken administration processes and establish roles and

responsibilities between itself, the Service and other organisations. These

reviews need to be undertaken while military administrators are still

available to assist in identifying and implementing solutions.

Recommenda t ions


a improves the timeliness and quality of services provided by the

Human Resource Service Centre;

b introduces regular visits by Human Resource Service Centre senior

personnel to camps and bases as a means of improving the mutual

understandings between the Centre and military commanders, and to

facilitate discussion on emerging issues;

c addresses, with the Services and as a matter of priority, processes that

are incomplete or do not incorporate necessary Service-specific

aspects. This needs to be progressed before the remaining Service

administration specialists are lost;

d improves user guidance and information, and methods of

disseminating changes to policies and processes;

e assigns priority to the development of a knowledge base of military

HR matters, so that this knowledge can be captured before remaining

specialists depart;

f develops a comprehensive training framework for Human Resource

Service Centre personnel; and

g recognises that many junior personnel may not have ready access to

DIXS terminals or KEA kiosks and may not be maintaining their

personal information to the level expected.


Sec t i on 4

Imp l i c a t i on s f o r fu tu re HR

adm in i s t ra t i on

HR adm in i s t ra t i on changes

4.1 The reorganisation of HR administration within the NZDF, which

included the establishment of the Human Resource Service Centre,

resulted in the Navy’s Writer trade being reduced and the administrative

trades within the Army and the Air Force being disbanded.

4.2 At the same time the administration centres at each camp and base were

disestablished. As well as transferring back office transaction processing

for HR administration this removed all face-to-face support. In the case of

the Army, not only were administrators removed from the camp

administration centres but also from those units which had an established

S1 personnel position. 10, 11

4.3 The remaining Navy Writers continue to provide HR administrative

support to naval personnel serving at sea. Writers also provide support to

shore units when they are on the ‘shore’ phase of their regular sea/shore

posting cycle. The Navy is examining the future requirements and

sustainability of the Writer trade.

4.4 The Army has developed an Operational Support and Information

Specialist trade, to which a selection of ex-administrators was transferred.

This trade has been developed and approved as an operational land

capability within the signals environment. It will be responsible for

managing information, supporting command post operations, and

managing reach back to New Zealand from overseas. Operational

Support and Information Specialist personnel will undertake the function

of the S1 position in units deployed.

10 The S1 position is responsible for acquiring, analysing and coordinating personnel information in order to present essential information to the commander to allow effective decision making.

11 The S1 position throughout the Army was intended to be removed and replaced by civilian Human Resource Advisors as part of the overall HR reorganisation. However, the inability of civilians to deploy has meant that the S1 position has been retained for operational purposes. How the function will be delivered in the future is currently being reviewed as part of the OPSIS trade development process.

S e c t i o n 4 - I m p l i c a t i o n s f o r f u t u r e h uma n r e s o u r c e a dm i n i s t r a t i o n


4.5 When not on operations Operational Support and Information Specialist

personnel will be posted to deployable units that have retained an S1

position. In this role they may continue to provide some limited

personnel support to unit commanders but they will not undertake the

role previously held by administrators.

4.6 The Air Force has also transferred a number of administrators into a new

logistics specialist trade. A review of the remaining existing administrator

positions within operational squadrons will consider how this task should

be carried out in the future. Logistics specialist trade personnel could

undertake some HR administrative tasks when units deploy.

Imp l i ca t i ons f o r cu r r en t and fu tu re HR admin i s t r a t ion suppor t

4.7 We found that the Services generally support the concept of a national

centre for undertaking HR administration and payroll transactional and

processing activities. However, each Service has concerns over the

absence of HR administration presence on camps and bases.

4.8 Issues supporting the need for local HR services range from the view that

it is unrealistic to expect junior personnel with limited access to the NZDF

intranet to undertake their own HR administration, to the lack of

knowledgeable people in units for them to consult. There is also concern

about the additional workload of administrative tasks being placed on

commanders and managers.

4.9 For the time being Navy Writers and Army and Air Force ex

administrators (including those now in their new trades) will continue to

provide some essential HR administrative support throughout their

organisations. This is however a resource that will rapidly dissipate.

4.10 If the Human Resource Service Centre is to provide a level of service

that obviates the need for the Services to maintain some HR

administration skills, it will need to improve its resourcing, skill levels

and technology tools.

4.11 This in itself this may not be sufficient. It has been suggested that an

alternative method of delivery using the hub and spoke model might

be desirable, with Human Resource Service Centre ‘spokes’ at major

NZDF locations.



4.12 An NZDF National Service Delivery Programme which is focused on

business and base service delivery across a number of business areas has

recently been commenced. Two projects under the programme are relevant

to the operation of the Service Centre. One involves a review of all Defence

contact and service centres, the other will review the management of

services on bases and camps, including general administration, executive

and personal support, registry management, and document management.

Between them, these reviews will consider the structure and methods of

delivery of all shared services across the organisation.

Conc lu s ion

4.13 The success of the Human Resource Service Centre in the near and

intermediate future depends on its ability to recruit, train and employ

enough qualified and experienced personnel to deliver a comprehensive

HR administration service to the NZDF.

4.14 As the only employer of HR administrators the Service Centre will need

to be able to grow sufficient staff to sustain not only its own requirements

but also for other areas involved in HR administration. It will, for

instance, become a training ground for future HR subject matter experts

because there will be no other area where knowledgeable and experienced

HR administrators can be developed.

4.15 Military personnel required to attain some knowledge of HR

administration, largely for operational purposes, will rely on the Service

Centre for their knowledge and training.

4.16 The Service Centre, and HR administration generally within the NZDF,

remains a work in progress. A considerable amount remains to be done

before the effective delivery of future HR support services to all areas of

the organisation can be assured.

Recommenda t ion


a requires Service initial training establishments to deliver, with the

assistance of the Human Resource Service Centre, appropriate

information on personal HR administration responsibilities; and

b ensures that junior officer training and training for unit commanders

and others with personnel management responsibilities, includes

appropriate elements of NZDF HR policy, processes and

administration such that officers can provide sound initial advice to

their personnel when required.

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